While taxes are unavoidable, taking advantage of eligible deductions ensures you’re not leaving free money on the table. This article explains the IRS mileage rate in detail—how it works, how to use it for deductions, and how to track your expenses correctly to stay compliant.
The IRS mileage rate is essentially free money for business drivers, allowing you to reduce your taxable income for every work-related mile driven. If you use your personal vehicle for business purposes—such as client meetings, deliveries, or job site visits—you can claim a standardized deduction per mile instead of tracking individual expenses like gas, maintenance, and insurance. This per-mile deduction is the IRS mileage rate. It simplifies tax deductions by bundling all vehicle-related costs into a single, easy-to-calculate figure, helping you maximize savings without the hassle of itemizing every expense.
In 2025, the IRS will allow you to deduct 70 cents per business mile—but only if you claim it correctly. That’s a 3-cent boost from 2024’s 67 cents per mile. This steady upward trend (from 65.5 cents in 2023) reflects rising vehicle costs and inflation, making it even more valuable for those who drive for work.
Here are some key mileage rates to keep in mind:
The business rate is higher because it accounts for all vehicle-related expenses: depreciation, maintenance, repairs, gas, insurance, and more. Meanwhile, the charitable rate has remained unchanged since 1998, as it’s set by law rather than adjusted for inflation.
I know you’re excited about claiming 70 cents per mile, but before you get ahead of yourself, remember—not everyone qualifies.
Thanks to the Tax Cuts and Jobs Act (TCJA), passed in 2017, the rules have shifted significantly.
If you’re an employee who uses your car for work, you’re out of luck. Gone are the days of writing off unreimbursed employee business expenses, with the exception of folks who are in the military.
Before you start counting your tax savings, here’s a breakdown of who actually qualifies for this deduction:
Let’s be crystal clear about what counts as business mileage:
Remember, you can’t claim 100% of your vehicle use unless you have a separate vehicle exclusively for business. If you use the same car for personal and business purposes, you’ll need to track and calculate the percentage used for business.
It’s now time for the million-dollar question: how should you calculate your mileage deduction?
The IRS offers you two options, and picking the right one could mean hundreds or even thousands of dollars’ difference in your tax savings.
This is the simplest, most hassle-free way to deduct vehicle expenses, which is why most entrepreneurs swear by it.
Instead of tracking every individual car-related cost, you simply multiply your total business miles by the IRS mileage rate—70 cents per mile in 2025
Total Business Miles x IRS Mileage Rate (70 cents) = Deduction Amount
This flat rate covers gas, insurance, maintenance, depreciation, and everything else, without the need to save every receipt. So if you’re a freelance photographer who drives 8,000 miles to various photoshoots throughout the year, this is how it would look:
8,000 miles x $0.70 = $5,600 deduction
That’s $5,600 off your taxable income without any complicated expense tracking.
All you need is a reliable mileage log (e.g., a notebook or a tracking app) to ensure you’re covered if the IRS ever asks for proof.
This method requires more time and effort, but it can potentially save you more money.
Instead of using the simple per-mile rate, you track every single car-related expense you pay for the year, including:
Since you are most likely using your car for both work and personal matters, you need to assess what percentage of your driving is for business. Take this example:
Your calculation would then be:
$8,000 x 60% = $4,800 deduction
Due to its convenience, the standard mileage method should be your go-to, especially if:
You’ve tracked your miles like a pro all year. Now let’s turn those miles into actual tax savings when filing time rolls around.
Here’s how you claim your mileage deduction depending on your business structure:
If you’re a sole proprietor or have a single-member LLC:
If you own a joint partnership business:
If you have either an S-Corporation (S-Corp) or C-Corporation (C-Corp), filing your mileage deduction can be trickier:
Filing your mileage deduction with tax software is straightforward, as most programs guide you step by step.
If you work with a tax professional, they will guide you through the process and provide a list of necessary documents to prepare, including the following
Staying organized throughout the year not only reduces preparation fees but also ensures that you maximize your deductions and include all eligible expenses. To simplify the process, use a digital mileage tracking app to automatically log your trips and maintain accurate records over time. While your mileage log isn’t submitted with your tax return, it’s crucial to keep it ready in case of an IRS audit.
Don’t leave money on the table—stay diligent with your tracking and optimize your IRS mileage rate to get the deduction you’re entitled to.